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What Do I Need to Know About Credit Scores & Reports?

February 1, 2018

Centier Bank What Do I Need to Know About CreditYour age, your height, your weight – there are a lot of numbers out there that can “define you.” But there is one number that affects your day-to-day life more than you may be aware: your credit score. 

Your credit score is a number that reflects the information in your credit report and can have one of the biggest impacts on your financial life. It can affect your ability to obtain credit, as well as interest rates and monthly payments on auto loans, mortgage loans, credit cards, and much more. It is determined by your credit history and is often reviewed by banks, cell phone companies, insurance agents, credit card companies – even potential employers.

Understanding how it works will help you maintain healthy finances, avoid increased fees, and enhance your access to credit.  

Your FICO® credit score can range from 350-850, depending on the scoring model used.  Higher scores can result in lower interest rates, longer repayment terms, and lower monthly payments.  Lower scores can result in higher interest rates, shorter repayment terms, and higher monthly payments.

So what exactly goes into your credit score report? 

  • Payment History: Do you consistently pay your bills on time?  Do you have outstanding collections?  Have you ever had a repossession or foreclosure?
  • Public Records:  Have you ever filed bankruptcy?  Do you have active tax liens or unpaid judgments?
  • Length of Credit History: How long have you been paying your bills on time? How long have you had outstanding debts?  While it’s never too early to start building your credit, or too late to rebuild your credit it is important to remember to consistently pay your bills on time
  • New credit: How often do you use credit? How often do you apply for new credit?  How many recent creditor inquiries have been made?
  • Types of Credit Used: Do you use credit cards? Are you currently using an auto loan? Home loan? Student loan?

It is important to remember that your credit score can change, depending on how your credit history changes within your credit report.  Federal law permits you to obtain a free copy of your credit report every 12 months, by taking advantage of this, you can ensure that information on your credit reports is correct and up to date.

So what’s next?
Take some time soon to see where you’re at. You can obtain your Free Annual Credit Report at www.annualcreditreport.com or call 1-877-322-8228. 

There is so much more to learn all of the ins-and-outs of your credit score, how it impacts your daily life, and how this score really does “define you” in the financial world. Different agencies use different scoring systems that offer different views into your credit history. 

Want to learn more? Centier Bank’s Community Relations and Business Development team offers Centier to You presentations on site to help businesses and employers educate their staff on financial health. Contact Sheila Sieradzki at ssieradz@centier.com to take advantage of this no-cost opportunity!

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